Amid more news reports, city contemplates a future without UBS

Published 9:03 pm, Monday, July 21, 2014

UBS, which moved its headquarters to Stamford in 1997, has been reported as being interested in moving back to Manhattan. A story in the Wall Street Journal last week described its trading floor as being taken up by mostly back-office staff. less

UBS, which moved its headquarters to Stamford in 1997, has been reported as being interested in moving back to Manhattan. A story in the Wall Street Journal last week described its trading floor as being taken ... more

UBS, which moved its headquarters to Stamford in 1997, has been reported as being interested in moving back to Manhattan. A story in the Wall Street Journal last week described its trading floor as being taken up by mostly back-office staff. less

UBS, which moved its headquarters to Stamford in 1997, has been reported as being interested in moving back to Manhattan. A story in the Wall Street Journal last week described its trading floor as being taken ... more

UBS, which moved its headquarters to Stamford in 1997, has been reported as being interested in moving back to Manhattan. A story in the Wall Street Journal last week described its trading floor as being taken up by mostly back-office staff. less

UBS, which moved its headquarters to Stamford in 1997, has been reported as being interested in moving back to Manhattan. A story in the Wall Street Journal last week described its trading floor as being taken ... more

UBS, which moved its headquarters to Stamford in 1997, has been reported as being interested in moving back to Manhattan. A story in the Wall Street Journal last week described its trading floor as being taken up by mostly back-office staff. less

UBS, which moved its headquarters to Stamford in 1997, has been reported as being interested in moving back to Manhattan. A story in the Wall Street Journal last week described its trading floor as being taken ... more

It is a question being debated across all corners of Stamford, from behind the cash registers of downtown restaurateurs and merchants to the upper echelons of city hall: Will UBS stay or go?

And if the Swiss banking giant does vacate its premises on one of the city's prime downtown corners, how will Stamford handle the loss of one of its biggest employers and economic drivers?

Starting in the summer of 2011, there were reports that UBS, which moved its headquarters from Manhattan to Stamford in 1997, was eyeing a return to the city. Not long after, Gov. Dannel P. Malloy stepped in with a $20 million loan that is forgivable on the condition that the company keeps at least 2,000 employees in Stamford until 2017.

That is the year when UBS' lease on its now iconic 650,000 square-foot salmon-colored office building at 677 Washington Boulevard is set to expire.

According to recent reports, it may be difficult to justify the need for such a large space. The Wall Street Journal and the Financial News last week published stories on how changes in the financial industry, particularly in the trading business, have led to major staff cuts both at UBS and its neighbor across the street, RBS, which in May confirmed reports it would cut as many as 400 jobs over the next 18 months.

Unnamed sources in the WSJ story, which ran on July 14, said that UBS' trading floor, considered to be the largest in the world, is now mainly being occupied mostly by "back-office, legal and technology staffers."

Asked to comment on the company's future plans, Karina Byrne, a spokeswoman for UBS, emailed the following statement: "We are not commenting or speculating, but we reiterate our commitment to keeping 2,000 jobs in the state of Connecticut as part of our five-year agreement with the state."

What is indisputable, however, is the company's shrinking head count in Stamford. According to the most recent numbers provided by the state, UBS employs 2,264 full-time employees. The staff size is almost half of what it was in 2007, when the bank had roughly 4,000 people on its payrolls.

The cuts have been industry wide in Stamford. According to the Business Council of Fairfield County, as of 2005, Stamford had 13,000 people employed in finance. Today, that number has shrunk to roughly 10,700.

Joseph McGee, the vice president of public policy and programs for the Business Council of Fairfield County, said the pressure to move to Manhattan demonstrates that the financial industry as a whole is contracting, and as a result, is looking to centralize again in New York City.

McGee, who as commissioner of Connecticut's Department Economic Development helped broker the deal to bring UBS to Stamford, disputed rumors that the company decided to leave Stamford because the city presented a handicap in its recruiting efforts.

"We have very sophisticated traders in hedge funds, and we have no problems holding them here," he said.

Nonetheless, he conceded, "Would traders rather be in New York? Yeah, you want to be where most of the jobs are."

Given the upheaval in the industry, McGee said it was reasonable to believe UBS would leave Stamford after its lease runs out.

"We, as a city, need to prepare for that eventuality," he said.

On that front, city officials acknowledge they've thought about the possibility of life without UBS.

Thomas Madden, the city's economic development director, said city officials have ongoing conversations with all of its major employers.

"UBS and RBS play an absolute important role in our economy," he said. "We'd love to have them here and we are working to make sure they have a future in Stamford."

All the same, Madden said that the city is talking with state economic development officials about Stamford's future over the next several years. At the same time, city officials are working on a new master plan that they hope will provide a road map for how the city should grow.

Another key part of Stamford's strategy will be to attract and foster new industries like technology and media.

"We are taking steps to ensure we have as diverse an economy as possible," he said.

While filling any huge office vacancy in the scale of UBS will present an important test for city and state officials, most experts say that the UBS headquarters will attract significant interest, whether it be from a single corporate tenant or several willing to divide the space.

"It's probably one of the best, well-located facilities on the East Coast for investment banking," said Jim Fagan, a senior managing director at Cushman & Wakefield.

Citing its modern infrastructure and proximity to transportation through the train station and Interstate 95, Fagan described the Class A office space as "everything you could want in a facility for a company of today's needs."

Madden called the 15-story building "a home run for anybody to walk into right away."

The sprawling 12-acre UBS site also presents the possibility of redevelopment, providing additional land on which a developer could to build commercial space.

Not that everyone is convinced that UBS' departure is a fait accompli. Three years, after all, is a long time in a volatile industry whose fortunes rest on the stock market.